5. Contribution of entrepreneurship in social, economic and personal development

5. Contribution of entrepreneurship in social, economic and personal development

5.1 importance and the benefits of entrepreneurship

 Definitions that have been presented for entrepreneur and entrepreneurship

An entrepreneur can simply be identified as, one who generates innovations by extracting environmental opportunities creatively while taking risks.

 There is no accepted definition to introduce who an entrepreneur is. The following definition can be given regarding an entrepreneur.

 “The person who sees changes in the market place as opportunities for businesses is an  entrepreneur. His armory is product innovation.”

 - Peter F. Drucker

 “An entrepreneur is someone who perceives an opportunity and creates an organization  to pursue it. The entrepreneurial process involves all the functions, activities and actions  associated with perceiving opportunities and creating organizations to pursue them”

-          William .D. Bygrave -

 “An entrepreneur is the person who destroys the existing economic order by introducing new products and services, by creating new forms of organization, or by exploiting new raw materials”

-          Joseph Schumpeter - 

  “Entrepreneurship is the bridge between capital and labour” 

-          Oxford dictionary -

“Entrepreneurship is facing up to uncertainties”

-          Richard Nantinut- 

“Entrepreneurship is the ability to launch a new company and carry it on successfully”

-           International labour Organization -

According to the above definitions , an interpretation about entrepreneurship can be  built up as follows

 “Entrepreneurship is the process of extracting the environmental opportunities creatively and generating innovation while bearing risks.

 Or

 “Entrepreneurship is the process of producing innovations by managing risks and  identifying business opportunities to satisfy human needs and wants”

The importance of Entrepreneurship

1.      There is an enormous need for entrepreneurs who can find innovations and react to changes in the world that changes rapidly.

2.      There is a need for generating innovations to survive in the competitive business world.

3.      There is a need for entrepreneurs in every organization, since entrepreneurs are the ones who can give leadership to the changing world.

4.      There is a need for generating innovations to uplift the living standards through satisfying human needs and wants at high level.

5.      The need for developing business functions in confrontation with the technology that changes day by day

6.      The ability to create employments through starting new businesses

The relationship between entrepreneurship and businesses

The process of producing innovations and managing risks to satisfy identified human needs and wants is known as entrepreneurship. To satisfy human needs and wants, the production of goods and services, distribution and all the other related activities in it, can be explained widely as businesses. Accordingly, the production of goods and services and all other related services in it are engaged by businesses as well as through entrepreneurship. But, identifying business opportunities, risk management and innovations are done by entrepreneurship when compared with businesses.

Accordingly it is clear that all enterprises are businesses whereas all businesses are not enterprises. Similarly, the end result of entrepreneurship is known as business.

The benefits of entrepreneurship

Through entrepreneurship, individual, institutional, social and economic benefits can be gained.

Examples:

Individual benefits

·         Having opportunities to make use of individual abilities.

·         Being able to get higher benefits through higher commitments.

·         Creating social status and acceptance.

·         Having a self-satisfaction.

·         Obtaining personal and financial gains.

Institutional benefits

·         Being easy to face competition

·         Expansion of business activities.

·         Continuous development.

·         Expansion of market shares

·         Becoming the expertise in the industry.

Social and economic benefits

·         Creation of new employment opportunities.

·         Creation of income opportunities.

·         Arising of opportunities to consume new goods and services.

·         Developing the standard of living.

·         Using regional resources for production

·         Development of new markets.

Entrepreneurship and economic development

The relationship between entrepreneurship and businesses can be clarified by the following points:

1.      Increase in national production as innovations are generated through entrepreneurship.

2.      Increase in the level of employment through producing new employment opportunities.

3.      Economic development becomes faster through producing new employment opportunities.

Increase in production -->  New employment opportunities --> Increase in income level -->Increase in purchasing power --> Increase in demand for goods

·         Increase in economic development through expansion of business activities and generating of new competitive markets.

·         Increase in demand for regional resources that are being used.

·         Creating an economic development as new businesses come to existence.

Trends in entrepreneurship

·         Global Entrepreneurship

·         Social Entrepreneurship

·         Green Entrepreneurship

·         Intra Entrepreneurship

Global Entrepreneurship

Engaging in trade globally is meant by this. In other words, no matter wherever in the world, with the use of technology, the ability to work beyond the borders through communication with any other country or countries or places in the world. Distribution of goods and services successfully from one place to all over the world to supply products for fulfilling identified consumer needs and wants of each country is harvesting the yield of entrepreneurship globally.

It is important here to have known about other cultures. It is important for this to maintain good relationships with other countries and nations. Opportunities can be generated by identifyingdifferences among nations and among cultures.

Social Entrepreneurship

This means to engage in innovations to solve social problems with the intention of social service. Benefits such as mental satisfaction, acceptance, praise, mutual help etc... are expected through social entrepreneurs. The aim of social entrepreneurship is to make the world a better place.

Green Entrepreneurship

This refers to the activities done with awareness of an entrepreneurial view to positively impact the natural environment with high risk for environmental and social problems or needs. Green entrepreneurs consider that protecting the environment is their core concept. They are very sensitive for environmental issues. They positively impact on natural environment through their business activities.

Intra Entrepreneurship

Creative people who are in different posts in organizations make changes in products and production methods. Top managers motivate those people to work creatively. This kind of entrepreneurship that introduces changes in an organization and implements them within an institute is known as intra entrepreneurship.

5.2 Entrepreneurial process

All the functions that are used to do the activities such as identifying business opportunities and formulating an organization to use them is known as entrepreneurial process.

The steps of entrepreneurial process 

·         Discovery

·         Concept development and preparing business plan.

·         Resourcing

·         Actualization

·         Harvesting

Discovery

At the first step of the entrepreneurial process, an entrepreneur generates ideas, identifies opportunities through environmental study and studies the market place as well.

 Concept development and preparing business plan.

In this step a business plan is prepared. It presents a detailed program which clarifies the business idea.

 Resourcing

In this step, the entrepreneur identifies financial, human and physical resources that are needed to start the business and he tries to acquire them.

 Actualization

In this step the entrepreneur carries out the operational activities and he uses resources to fulfill the aims of business.

Harvesting

This is the step in which the entrepreneur takes decisions regarding the future growth and development of the business. 

 5.3 The ability to act as an entrepreneur by developing the entrepreneurial characteristics and competencies.

The difference between an entrepreneur and a businessman 

Entrepreneur	Businessmen
Commences a business with his own idea or new concept.	Commences a business with an existing idea or concept.
The business opponent of the entrepreneur is himself	Has other business opponents.
The entrepreneur prepares himself for new business opportunities.	The businessman is always engaged in his business activities
Is an innovator	Is traditionist
Faces risk	Engages in activities protectively
When problems arises, faces them courageously to overcome them	Gets discouraged when faced with difficulties

Some entrepreneurial characteristics 

 Willingness to take risks

He likes to face risks rather than avoid risks. But facing any risk is not meant by this.

Creativity

This refers to the ability to see, think and take actions differently.

Commitment

This refers to work with great enthusiasm until he achieves his objectives.

Self-confidence

While an entrepreneur has to face several problems, he has the belief that he can successfully overcome them.

Self-reliant

He has a desire to put his own ideas into effect rather than being dependant on others’ ideas.

Some entrepreneurial skills are given below:

Leadership skills.

 He is the leader of his business. He leads the followers formally by encouraging them  to get the work done.

 Interpersonal skills

 Maintains a favorable relationship with both internal and external parties.

Communication skills

 Information is a resource for him. Maintains a proper co-ordination to achieve objectives.

 Basic management skills

 Possesses basic management skills such as planning, organising, leading and controlling.

Given below are the ways of developing entrepreneurial characteristics and skills.

Self-evaluation

 First one should identify entrepreneurial competencies specifically and then he should  conduct a self-evaluation such as, to what extent those competencies are present in him? what competencies he doesn’t have, and what competencies are there within him that  should further be developed.

Training

Participating in various training programs to develop his entrepreneurial competencies.

 Education

An education on entrepreneurship apart from general education.

Profiting from experiences

The experience gained through working in other enterprises or by working as an entrepreneur himself.